STF: it is Constitutional the incidence of ISS in franchise agreements

It is Constitutional the incidence of ISS-tax on services of any nature in franchise agreements. This is the latest decision of the STF.

As previously disclosed on our website, the STF plenary would decide for the constitutionality of the impact of the ISS on franchise agreements between the 22nd to the 28th of May.

And finally the decision came out. For the STF, the municipal tax is levied on franchising.

The issue was judged in the virtual plenary, in a vote that ended on Thursday, 28. The rapporteur, Minister Gilmar Mendes, was accompanied by Alexandre de Moraes, Edson Fachin, Cármen Lúcia, Luiz Fux, Rosa Weber, Ricardo Lewandowski and Roberto Barroso.

Minister Gilmar Mendes, rapporteur, voted to dismiss the appeal and fixed the following thesis:

“The incidence of tax on services of any nature (ISS) on franchise contracts (franchising) is constitutional (items 10.04 and 17.08 of the list of services provided for in the Annex to complementary law 116/03).”
Gilmar mendes

The full argument of the court was that it does not violate the constitutional text nor does it deviate from the current guidance of the court to charge ISS on franchise agreements. “It should be reiterated that franchise agreements are of a mixed or hybrid nature, which encompasses both obligations to give and to do”.

Gilmar Mendes was accompanied by Alexandre de Moraes, Edson Fachin, Carmen Lucia, Luiz Fux, Rosa Weber, Ricardo Lewandowski and Roberto Barroso.

You can read the integra of the decision by the link below:

ISS decision franchise agreements